the changed agenda in the global sourcing industrysearch.oecd.org/sti/44083521.pdf · mckinsey...

November 14, 2009

Global ICT services sourcing conference, Sharm-el-Sheikh

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The changed agenda in the

global sourcing industry:

perspectives and developments

McKinsey & Company | 1

Executive summary

▪ Long-term trends towards increased outsourcing and offshoring are prevailing. Driven by a changing

environment the industry size is expected to triple in the next 10 years

– Fundamental advantages of outsourcing (focus on core) and offshoring (need to address onshore skills

shortage and cost pressure) continue to hold, thus O+O industry will portray further growth

– 20-25% of future growth likely to come from further penetration of already existing segments, while 75-80%

likely to stem from new market segments: new verticals (healthcare, etc), SMBs and new domestic

outsourcing segments in BRIC countries, overall tripling the addressable market to 1,5 trillion USD by 2020

▪ While the economic downturn has caused a moderate slow-down in industry growth, there are early

signs of recovery

– 2009 expecting slowest revenue growth in the history of the O&O industry

– Early signs of recovery supported by increased industry activity in 2H 2009 and optimistic outlook of users

– However, significant uncertainty remains about ultimate timing and shape of economic recovery (V vs. W)

▪ Moving forward, the imperatives for successful O&O management are coping with increased uncertainty

and complexity combined with a strong belief in the fundamental growth perspectives of the industry

– Companies need to focus on increasing their ability to manage uncertainty in a flexible and agile mode

– The most predominant trends are taking the industry towards an unseen complex multi-dimensionality

▫ Multi-servicing: Everything that can be can be outsourced a/o offshored will be

▫ Multi-sourcing: Buyers of O+O services will play their market choices and exercise price pressure

▫ Multi-shoring: Ever new locations will strive for a share in this growth market – Egypt seems well

positioned

– Key take-aways: 1) Consider that O&O fundamentals are prevailing and invest in bold moves, 2) Make your

organization "fit" for managing uncertainty and consider O&O as key levers 3) Manage the emerging

complex multi-dimensionality in O&O


Fundamental advantages of outsourcing and offshoring continue to hold

SOURCE: McKinsey O&O Practice

▪ Focus on core business activities/capabilities

▪ Outsource non-core, which are core for partner

▪ Decrease cost through sharing partner’s scale

▪ Variabilize fix cost, and thus

▪ Increase sourcing flexibility to

▪ Meet changing business conditions

▪ Cope with skills shortage in onshore markets by tapping

into offshore talent pools; e.g., India produces ~4 million

graduates p.a. willing to participate in global workforces

▪ Improve quality of services through employing higher

skilled labor; e.g. employment of commerce graduates

for accounts payables processing

▪ Lower cost base through labor arbitrage

Fundamental advantages

Offshore2

Outsource 1


Focus on the core business: Easier said than done! 1

SOURCE: McKinsey

Auto

Financial Services

Logistics & Transport

Auto Supplies

Core- vs. Non-Core Business ?!

(Example: Automotive industry)Main source

of earnings at

▪ GM

▪ VW etc.

McKinsey & Company | 4SOURCE: McKinsey

Core Capabilities mainly shaped by share of internal

value generation

1

A

Global OEM

B

Regional Supplier

25

Own value

generation

65Own value

generation

Is there a necessity for such a large difference

in share of internal value generation?


ProcureCustomer

Service

Create Make Sell Service

Human Resource Management

Administer

IT Infrastructure incl. AD/AM

Accounting, Finance, Legal & Taxes, …

Focus on core capabilities may look like A... 1VALUE ADDED CHAIN OF INDUSTRIAL ENTERPRISE – EXAMPLE A

SOURCE: McKinsey

Core capabilities


… or: Focus on core capabilities rather looking like B!1VALUE ADDED CHAIN OF INDUSTRIAL ENTERPRISE – EXAMPLE B

SOURCE: McKinsey

Core capabilities

ProcureCustomer

Service

Create Make Sell Service Administer

Human Resource Management

Accounting, Finance, Legal & Taxes, …

IT Infrastructure incl. AD/AM


Offshore talent pools can yield quality and productivity gains2

Business Process Offshoring IT Offshoring

Number of correct

transactions/number

of total transactions

Percent

Project performance

Percent on time and budget

U.K.

Bench-

mark

Remote

facility

95

98

Total satis-

faction factor

85

92

95

75

45

30

1 2 3 5

CMM level

41 of 58 CMM level 5

companies in India

INDIA EXAMPLE

SOURCE: McKinsey P360


While cost savings remain a driving factor for O&O activities …

SOURCE: McKinsey Finance 360 Database; McKinsey O&O Practice, MIT Sloan CISR Survey on 80 Outsourcing

contracts

Why outsource or offshore? Cost savings in support functions

1 Includes management reporting, budgeting and forecasting, decision support

2 Includes tax, treasury, risk management, audit, M&A

3 Includes accounts payable, accounts receivable, T&E, all accounting processes

65

72

Shortening of

throughput/

development

time

45-50

Quality

improvements55-60

Flexibility

increase

Cost savings

Number of mentions as important

Percent Indexed numbers

50

50

66-74

30-35

36-39

IT system

design/

process

automation

4-5

4-5

Consoli-

dation

3-5

4-5

Sourcing

(offshoring/

out-

sourcing)

8-10

3-4

Original

cost base

100

Future

cost base

Transaction processing3

Business1 support

and expert functions2

Process

and exe-

cution

Organiza-

tion/gov-

ernance

Demand

manage-

ment


Master transaction center

for WE

EU/global center for core

competencies

(Co-)Center of EU

business management

Driver ▪ Low-cost labor

▪ Broad talent pool

▪ Deep talent pool

▪ Engaged workforce

▪ Building career models

▪ Customers/suppliers

moving East

▪ Interesting markets

▪ Established EE footprint

Examples ▪ Lufthansa (Cracow)

▪ Zurich/Capgemini

(Cracow)

▪ P&G/HP (Bucharest)

▪ Delphi (Cracow)

▪ Siemens (Wroclaw)

▪ SAP Labs (Sofia)

▪ Dell (Bratislava)

▪ JCI (Bratislava)

Transaction factory

Knowledge hub

Corporate/regional

headquarters

Faster move to knowledge-intensive services

driven by combination of factors

▪ Talented workforce with good functional knowledge

▪ Cultural proximity/accessibility/time-zone overlap

▪ Language capabilities

… many companies have recognized the potential of O&O

beyond labor arbitrage

CEE EXAMPLE

SOURCE: McKinsey EESTCom2, April 2007


Users are convinced of the (growing) importance of O&O

Companies offshore more …

How do you foresee the impact of the recent

financial crisis on offshoring activities

and decisions?

Percentage of responses (n = 76), EESTCom

survey 2009

… and O&O workforce takes up additional/

higher value-add work

Shift of work

Headcount changes

SOURCE: EESTCom survey 2009; press; interviews

4

44

51

3-50Fewer functions

offshored

Quicker transition 31-60

Tightening of

business cases

More functions

offshored

Others

European Investment Bank

▪ Onshore staff more heavily affected

by lay-offs

▪ Continued buildup of O&O resources

▪ Relative part of headcount in low-cost

locations increased

Offshore

Onshore


Offshoring revenues

USD billions

Significant industry growth

Growth of O&O continues keeping fundamental momentum

SOURCE: NASSCOM report 2009; McKinsey O&O Practice

48

90

6

40

25%

2020E

440

250

110

80

2015E

230

100

2008

90

30

12

2005

37

1121

5

2001

8

CAGRESO

ITO

BPO

Global

transformative

forces are the

main driver of

future growth


Productivity revolutionThe great rebalancing▪ Asian 21st century ▪ Emerging markets

scaling up, also in innovation

▪ Further urbanization

▪ Shrinking working age population in key developed countries

▪ Huge pressure on productivity to achieve economic growth

Pricing the planet

▪ Rapidly increasing consumption/supply gap in key natural resources creating need for resource efficient climate change solutions

▪ Global economic crisis led to major shifts in industry structures and regulatory control

▪ Countries compete for business activities

Opportunities

▪ Rise of untapped

market segments

– New

Geographies

– New Service

lines; e.g.

climate

change

Verticals like

public sector,

healthcare

– SMB customer

segments

– Increased

adoption of

global

sourcing

Risks

▪ Erosion in existing

segments from

– Automation

– Cannibalization

of existing

services (e.g.,

SaaS replacing

production

support)

– Spend

consolidation

– Slowdown in

adoption due to

greater

regulatory

control

SOURCE: McKinsey Global Forces Research, Oct. 2009; O&O Practice, Nov 2009

Five global transformative forces impact the outlook of the O&O industry

Global Grid• Increased Internet + mobile links

transforming the way people interact/live

• New trade flows among developing countries

Market State

5 global transformative forces


130

Core markets

2008

500

220

150

Total

addressable

market in 2020

1,500-1,640

405-440

895-980

200-220

Domestic

outsourcing

market in new

geographies

380-420

230-250

85-90

145-160

New verticals

in developed

countries

190-220

60-70

130-150

Growth in

core markets

200-250

30-40

120-140

50-70

280-310

New customer

segments

100-110

Total addressable market for global sourcing and domestic outsourcing, 2020

USD billions

Innovation can further expand the addressable market

▪ SMBs▪ Public sector

▪ Healthcare

▪ Media1

▪ Utilities

▪ 6 verticals (BFSI, telecom,

retail, pharma, manufacturing,

travel)

▪ North America, Western

Europe, Japan

▪ Large enterprises

75-80% of growth from market

segments, that are not core today

1

2

3

Engineering

services/R&D

Business services

Technology services

1 Printing and publishing

SOURCE: Global Insight; Gartner January 2009

Currently untapped segments will drive 75-80%

of incremental growth by 2020

▪ Brazil

▪ Russia

▪ India

▪ China

20-25% of growth

from core markets


Sources of new market growth by 2020 are: Four additional verticals,

SMBs across numerous verticals and Domestic BRIC outsourcing

SOURCE: Global Insight; Gartner January 2009; McKinsey analysis

Global sourcing addressable market for new verticals, 2020

Global sourcing addressable market for SMBs by vertical in core geographies,

2020

~20

~35

Banking Retail

80-90

~10

InsuranceWhole-

sale

banking

30-35

Travel

15-20

OthersManu-

facturing

~40

Total

230-250

USD billions

190-220

90-105

TotalMedia

(printing and

publishing)

17-20

Utilities

25-30

Healthcare

providers

58-65

Public sector

and defence

1

32

2

1

Total addressable market from new

geographies, 2020

India

90-100

China

205-225

Total

380-420

40-45

Brazil

45-50

Russia

3


Executive summary









signs of recovery











positioned





Revenue growth for leading Indian O&O

players1

Net Profit growth for leading Indian O&O

players

Sequential

quarter

change

Year-on-year

change

SOURCE: Kotak Tech quarterly data book; company websites

-3.1-3.1

3.74.0

1.4

9.1

22.0

28.0

-4.2-4.6

6.2

-7.9

-10.6-6.3

4.62.2

4Q083Q082Q081Q08

1 Results declared in the last 4 sequential quarters of FY 2009 for Top 13 players, Rs to US$ conversion based on income statement publication

date rate

Overall revenue and profit performance of leading Indian O&O players

worsened in 2008Percent

4Q082Q081Q08 3Q08


2009 expecting slowest growth in the history of the O&O industry

SOURCE: NASSCOM, EESTCom 2009, Customer surveys, McKinsey analysis

1 Including ESO and High Tech R&D services

2 Estimates

O&O industry revenue

US$ billion

19 25 30

43

5560

80

BPO

ITO1

20092

94-96

32-33

62-63

2008

90

20072006

62

13%

4-7%

McKinsey & Company | 18SOURCE: EESTCom survey 2009; GLG survey 2009; company websites, BITKOM 11/2009

1 Profits declared in the last 4 sequential quarters, Rs to US$ conversion based on income statement publication date rate, Indian Fiscal year

Decision makers have an optimistic view of their future O&O activities

and expansion, with early signs of recovery evident even within 2009

What are your growth plans for captive offshore

locations in the next 12-18 months?Examples of early signs of recovery for 20101 (USD Mio)

Percentage of respondents (n = 45), EESTCom survey 2009

In percentage terms, how would your outsourced FTE

volume change in the next 1-2 years?

Percentage of respondents (n = 30), GLG survey

13

3140

97

20-30%10-20%Will not

change

much

10-20%20-30%

Decrease employment

in offshore locations

Expand employment

in offshore locations

30

45

20

5

11-20%1-10%Will not

change

1-10%

Volume

decreaseVolume increase

339315261273 +30%

245217202208

4Q08 1Q09 2Q09 3Q09

+21%

3183143183200%

German market growth (estimates in %)

IT market Outsourcing market Total size

-2

0 7

52009

2010

14,3

15,4

bn EUR

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2007 08 09

02 03 04 05 06 0708 09 1009070805 06 1104 10 11 12 01 0203 04 05 06 07 080912 01 10 11 12 01 0203 04 05 06

2010

70

75

80

85

90

95

100

105

High uncertainty of so far unseen recent crisis situation

best addressed via scenarios

Dealing with high uncertainty … … via scenarios

Ifo-Index in points, year 2000 = 100

ILLUSTRATIVE

SOURCE: FTD, Oct.28, 2008, p16; updated with Ifo stats and complemented with scenarios

Realists?Moderate crisis

Pessimists?

Drastic crisis

Over optimists?

Rapid

recovery

Medium-term

recovery at

lower levelOptimists ?


Executive summary









signs of recovery











positioned





To navigate the uncertainty, companies need to become more adept

at “shaping the future”

SOURCE: McKinsey Center for Managing Uncertainty

Build

awareness

▪ Model company performance and impact under each scenario

Enhance

resilience

▪ Significantly increase scope and intensity of resiliency actions

to safeguard current business

Increase

flexibility

▪ Build and acquire options for your business and implement "no-

regret" moves

Determine

posture

▪ Take conscious decision wheather company wants to play

defense, attack or adapt


Multi-servicing Multi-sourcing (exampl.) Multi-shoring

Overarching trends in O&O towards complex multi-dimensionality

SOURCE: McKinsey

Business model/processes

Business capabilities

IT infrastructure products

IT infrastructure

IT applications

IT integration platform

Business model/processes

Business capabilities

IT infrastructure products

IT infrastructure

IT applications

IT integration platform

▪ Proliferation of services

offshored or outsourced

▪ New customers, verticals

and geographies being

serviced

▪ Tendency towards indus-

trialization of

transactional services

and adoption of higher

value activities

▪ Buyers increasing pres-

sure on service providers

through increased experi-

ence and sophistication

in outsourcing

▪ Buyers outsourcing 1

activity to several service

providers

▪ Determination of right

amount of vendors

(typically 2 or 3)

▪ Tendency to diversify risk

▪ Emerging location

continue to sustain due to

economic attractiveness

and risk diversification

▪ Advanced location and

governance architectures

are developing

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Opportunities for global sourcing exist across various functions

of the healthcare provider value chain

4

0

5

0

35

35

Sub-functionTheoretic maximum share of function that can be outsourced

Healthcare provider function Per cent

Share of employment

Per centPatient care

provision

▪ Physician, practitioner services

Nursing services ▪ Nursing care provision

Other

professional

healthcare

services

▪ Operating room

▪ Radiography/nuclear medicine

▪ Case management

▪ Pharmacy

▪ Respiratory therapy

▪ Physical therapy

▪ Transport

▪ Other health professional clerical

▪ Diagnostic laboratory etc.

Hospitality

functions

▪ Housekeeping

▪ Plant operations and maintenance

▪ Security

▪ Laundry/linen

▪ Food services

IT services

▪ Hardware operations1

▪ ADM

G&A ▪ General management and legal

▪ Purchasing

▪ Patient billing

▪ Finance and accounting

▪ Personnel/HR

▪ Planning

▪ Medical records

▪ Admissions

▪ 20

▪ 10

▪ 10

▪ 5

▪ 15

▪ 15

▪ 10

▪ 10

▪ 30

▪ 30

▪ 10

▪ 15

▪ 15

▪ 40

▪ 20

▪ 10

▪ 10

▪ 15

▪ 10

▪ 5

▪ 10

▪ 20

▪ 5

▪ 60

19

25

28

13

5

10

4

0

▪ -

▪ 70

▪ -

▪ 10

▪ -

▪ -

▪ -

▪ -

▪ -

▪ -

▪ -

▪ -

▪ -

▪ -

▪ 40

▪ 40

▪ 50

▪ 50

▪ 25

▪ -

▪ 75

▪ 10

▪ 60

Total address-

able market for

healthcare

providers is

expected to be

USD 58 billion-

65 billion

by 2020

High degree

of offshor-

ability

NEW VERTICALS

1 Hardware operations not included

SOURCE: Interviews; McKinsey Global Institute analysis

HEALTHCARE EXAMPLE


Potential technology and business services offerings

for healthcare providers

Most important technology services applications1

Per cent

Top-3 priorities

▪ Patient-facing services: Medical call centres to reduce

cost of hospital admissions, telemedicine for remote

monitoring and disease management

▪ Payer/provider-facing services: Billing, administration,

scheduling, purchasing etc.

Important business services offerings

▪ Dutch company

providing outsourcing

for billing and

collections

▪ German medical call

centre company offering

on-line and off-line

medical consulting for

hospitals

▪ British company

administering and

supporting corporate

healthcare programme

▪ German company

providing disease

management

counselling for

chronically ill patients

Examples

1 2007 HIMSS leadership survey of hospital CIOs

SOURCE: Interviews; McKinsey Global Institute analysis

NEW VERTICALS

29

29

35

37

43

46

47

47Computerised practitioner

order entry (CPOE)

Electronic medical

records

Clinical information

systems

Clinical data repository

Evidence-based medicine

at point of care

Point-of-care

data collection

Bar-coded medication

management

Enterprise-wide clinical

information sharing

HEALTHCARE EXAMPLE

http://www.innovacare.de/top/infocenter/infocenter.shtml


Focus of

current

global

sourcingHigh

Low

Low High

Modularity

• Ease in defining work packages with well defined interfaces

• Number of feedback loops

• More external interfaces and instabilities

Module design

Systems engineering

Certifications

Configuration and

control management

Project

management

Technical and plant

simulations

Requirement

management

Integrated

design

Advance R&D

e.g., materials

Layout

Dynamic

analysis Physical prototype

Electrical

design

CAE

CFD

FE analysis

Technical

publication

Data conversion

(2D to 3D, v4 to v5)

Basic design

Process

Optimisation

Low-complexity

subassembly

design

Database

management

ECN

Ability to manage risk

▪ Criticality/risk

associated with

process

▪ Source of

competitive

advantage

▪ Requirement to

retain in-house skills

Asset

information

management

Product design market will expand as companies globally

source increasingly complex activities

HIGHER VALUE ADD

SOURCE: McKinsey analysis


Consumerisation of technology will stimulate adoption

of global sourcing by SMBs and even individuals

Cu

sto

mer

Provider

Individual

Professional services

Legal

Accounting

Creativity/advertising

Financial services

Telemedicine

Travel servicesMedical advice

Tuition/homework

Business

Ind

ivid

ua

lB

usin

ess

Present scope of

services (large

enterprises)

SMB

B2C

NEW CUSTOMER SEGMENTS

SOURCE: McKinsey analysis


… but providers willing to help companies increase

O&O efficiency

Pricing pressures likely to continue, but potentially with

increase in volumes

O&O prices are likely to decline …

SOURCE: Economist; Forbes Asia; interviews 4/2009

UK Pharma company

▪ Intuition to grow large outsourced baseline further led

to renegotiation of existing deals

▪ Providers recognize the growth potential and offer

– Rate adjustments, especially if overall volume

increases

– Cooperation on efficiency improvement

– More specialized services

What is the likely change in technology and

business services billing rates in 2009?

Percent respondents, n = 29

2009 outlook

36 46

34

40

2010

10

Existing

contracts

New

contracts

Reduce billing rates

by more than 10%

Reduce billing

rates by 5-10%

Maintain current

billing rates

100

4

Increase

billing rates

100

We are experiencing pricing pressures of anywhere

from 4% to 15%.

– Subramanian Ramadorai, CEO of TCS, March 2009

[There are] predictions that contract prices charged

by Indian firms are likely to drop. CLSA1 […] predicts

they will fall by 3-5% in the next fiscal year, starting

in April 2009

– Economist, Oct 2008


OpCO ADM outsourced to vendor A

OpCO ADM outsourced to vendor B

OpCO untouched or no OpCo

SOURCE: Various press clippings

Dual sourcing ADM Outsourcing deal as challenging model

of a next generation multi-sourcing arrangement

▪ Retained in-house

– ADM strategy & architecture guidance

– Select Competence Centers

– Vendor Management & Controlling

▪ Bulk of USD 1 billion ADM budget

outsourced to A or B for 7 years

▪ Out of 6,000 ADM FTEs in next 3-5 years

(of which 3,500 are contractors), 2,500

move to A or B

▪ Contracted blended rate of USD xxx p.d.

requiring massive offshoring

▪ Recent B acquisition in India gets

substantial load out of this deal

EXAMPLE


Companies diversifying location footprints with established

locations loosing share

SOURCE: EESTCom 2009, McKinsey analysis

Share of growth in seats for BPO & ITOCountry footprint

# of companies in the sample 100% = thousand FTEs

39%

100% =

1-2

countries

>=3

countries

2009

44

61%

2008

44

72%

28%

5158

100% =

India

Other

locations

2009 E

~215-250

42

2008

~355

49


North

America

Eastern

Europe

India

China

South-East Asia

▪ Philippines are

preferred

destination

for voice

▪ Continued growth

in Malaysia

▪ Vietnam still

nascent

▪ Emergence of Egypt as potential

scale location of choice

▪ Morocco continues to be

destination of choice for French

companies (~5 deals in 2009)

▪ Limited movement of scale

services to near-shore

North American destinations

though some movement of

near-/close-shore services

▪ Eastern Europe continues

to maintain share of

offshore FTEs

▪ ~86% of growth in

existing centers

▪ Argentina and Brazil with

different risk and talent

profiles; European

languages

▪ Emergence of Argentina

with notable landmark

transactions

North Africa

South America

▪ China doubling ITO

jobs with 100,000+

FTEs likely to be

added in domestic

and export in 2009

SOURCE: McKinsey

Strong momentum seen in the growth of emerging offshoring

destinations, based on strong performance in niche areas


British

German

Spanish

60100

Novosibirsk,

Dalian

10 - 20

Gdansk,

Bratislava,

Cluj

30 - 40

RostockHamburg

5080

Buenos Aires,

Mexico City

30

Constanta,

Varna

15 - 25

ValladolidMadrid

1535

65

130

Hyderabad,

Bangalore, …

Talinn,

Riga

NottinghamLondon

▪ Labor

regulation

▪ Proximity

▪ Compliance

▪ Cultural

affinity

▪ Cost

▪ Scale

Global sourcing is happening at various shoresLabor cost index for various shores/semi-experienced software engineer 2006 est.

SOURCE: McKinsey O&O Practice June 2007

Onshore

Close-shore

Near-shore

Offshore


Egypt seems well positioned in attracting O&O industry investments

Sources: ITIDA;

▪ Government

progressing in

reforms targeted

to attract

investors and to

simplify doing

business

▪ Dedicated

agency (ITIDA)

supporting

growth of

BPO/ITO sector

and inflow of new

investors

▪ Integrated

demand strategy

with talent pool

enhancements

established to

attract investors

with specific

service offerings

Egyptian government

Information Technology Industry Development Agency

Information Technology Institute

& ITIDA

▪ Tax reforms (e.g., reduction of personal

and corporate tax rate)

▪ Customs reforms

▪ Intellectual property protection reforms

▪ Financial sector reforms

▪ Support and foster development of BPO/ITO industry

▪ Guide and promote investments in ICT/BPO sector

▪ Increase exports of ICT products and services

▪ Support R&D in the ICT sector and implement results

▪ Focused outreach to targeted investors based on

Egypt's value proposition

▪ University curriculum interventions to scale up suitable

graduates pool for BPO activities to 10,000+ on annual

basis

▪ Finishing schools and structural university interventions

to enhance skill set in European languages by 1000+

annually

▪ IT specific talent programs under design to support

growth of ITO industry


Single MultiServicing

Single MultiSourcing

Single MultiShoring

CORE:

Complexity

Reduction

COPE:

Complexity

Performance

Enhancement

Focus on CORE appropriate for majority of enterprises;

a small league will be capable to capture COPE advantages

% of WE enterprises regarding proper complexity management strategy

SOURCE: McKinsey O&O Practice 2009

▪ Capturing value from

network management

strategies; e.g. hub &

spokes

▪ Exploring the long tail

▪ Partner ecosystems

▪ Managing for simplicity across the whole

value chain

▪ Capturing value from lean programs and

taking out variance wherever feasible

▪ Focus, focus, focus


Key take-aways for successful O&O management

in the current and likely future environment

Make your organization "fit" for managing the

uncertainty and consider O&O as key levers to

increase flexibility and agility

Manage the emerging complex multi-dimensionality in

O&O and apply the best mix for your organization

Consider that O&O fundamentals are prevailing and

invest in bold moves to increase your long-term

benefits

SOURCE: McKinsey O&O Practice 2009

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